DETAILS ON SALE AGREEMENT ON RIJECKA AND SPLITSKA BANKS ARRANGED

ZAGREB, April 12 (Hina) - The Croatian state Agency for the rehabilitation of banks and securing savings investments (DAB) on Wednesday arranged all details of an agreement on the sale of Rijecka Bank to Germany's Bayerische Landesbank, and of the Splitska Bank to Italy's Unicredito. The signing of the agreement is expected within a week. Rijecka Bank will be sold to the Bayerische Landesbank for US$41.24 million, and the Splitska Bank to the Italian bank for euro 48.2 million. The government agency will keep 25 per cent of stock in both banks. The difference in the price of the two banks is in that the Rijecka Bank is being sold with a portfolio the bank has in other companies, while this portfolio has been withdrawn from the Splitska Bank. The portfolio owned by the Splitska Bank will be managed by the DAB, First Deputy Prime Minister and DAB's management board chairman, Goran Granic, said on Wednesday. The money from the privatisation of these two banks will be included in the government budget in June. Granic announced the Government was continuing the process of bank privatisation, and consultants will soon be elected for the privatisation of the Croatia Bank and the Dubrovacka Bank. The sale of banks was not good business, Granic said, adding the state was at a loss by their sale because tax payers will pay for the price of rehabilitation of the banks. "this is a painful move the Croatian state has to make in order to obtain healthy banks. Healthy banks are necessary for the development of the economy," Granic said. He held it was good that after the privatisation of the Zagreb Bank and the privatisation of the Rijecka and Splitska banks the state will get three healthy banks with good capital, of which it will keep 25 per cent of stock. The price for this is not great, but it could not be helped, Granic said. He announced the DAB would prepare comprehensive reports on the rehabilitation and privatisation of banks. (hina) lml jn